Fnm — Investor Presentation 2024

Nov 19, 2024

FNM Group Strategic Plan 2024-2029

19 November 2024

Highlights

FNM aims to become the reference point in mobility infrastructure & services and energy to drive the competitiveness of regional territories with innovative, safe, and sustainable solutions

The FNM Group

Strategic Plan Guidelines

Sustainability targets

Strategic Plan Projections

Appendix

An integrated player in infrastructure management and mobility services in Northern Italy

Infrastructure portfolio of mobility assets…

Motorways, Railways and LPT

…and energy infrastructure assets

Past performance – steady growth and strong resilience, despite extraordinary macro events

The FNM Group

Strategic Plan Guidelines

Sustainability targets

Strategic Plan Projections

Appendix

Driving competitiveness in metropolitan and regional areas with innovative, safe, and sustainable solutions…

Our VISION is to be a driving force for the development of metropolitan and regional areas, enhancing the quality of life for people, cities, and businesses in an accessible and inclusive way, creating connections that generate value…

…for this reason, our MISSION is to develop and manage infrastructure and services for a world in motion and the energy transition, according to principles of innovation, safety, and economic, social, and environmental sustainability

We recognize the importance of our role in contributing to the Country's ecological transition

… thanks to sustainable infrastructures and services

Long term trajectories

DEVELOPMENT OF LARGE METROPOLITAN & REGIONAL AREAS

• Population growth and aging
• Italian GDP concentration in Lombardy

SUSTAINABLE & DIGITAL COLLECTIVE MOBILITY

• Dissemination of innovative mobility models

GREEN TRANSITION

• Support from EU and Italian green regulation
• Need to increase renewable energy production and contribute to the energy transition plan

Ambition to become the reference point in mobility infrastructure & services and energy to drive the competitiveness of regional territories

Sustainable Mobility

• EXPANSION OF MULTIMODAL OFFERINGS

• Strengthen leadership in local rail and road public transport
• Maintain presence in motorway concessions
• Create an integrated partnership ecosystem (MaaC paradigm)

• FLEET RENEWAL AND INCREASE CAPACITY TO IMPROVE THE QUALITY OF THE OFFER

• Invest in safety, regularization, and digitalization of networks and fleets
• Continue as the implementing entity for investments funded by Regione Lombardia up to €1.8bln

• RENEWABLE ENERGY PRODUCTION CONTRIBUTING TO GREEN TRANSITION
  • Develop and manage facilities for renewable energy production (solar and wind)
• HYDROGEN DEVELOPMENT TO SUPPORT MOBILITY DECARBONIZATION
  • Establish leadership in hydrogen production and distribution for transportation networks

Group's strategic ambitions for 2029

Strategic commitment to invest in businesses with low volatility profile

Volatility

The FNM Group

Strategic Plan Guidelines

Sustainability targets

Strategic Plan Projections

Appendix

ESRS: European Sustainability Reporting Standards

1 – The Strategic Plan considers the 3 projects: Bovisa, Saronno and Busto Arsizio

ESRS: European Sustainability Reporting Standards

1 – The Strategic Plan considers the 3 projects: Bovisa, Saronno and Busto Arsizio 2 – KPI referring to 540 track-km and considered investments financed by RL; 3 – Activation of 3rd track between Affori and Cormano, T2-Gallarate, Seveso Node and Bovisa Node

20

Governance

Plans¹

22

1 – Which identify the relevant processes and the resources/assets essential for their operation

ESRS: European Sustainability Reporting Standards

of having Business

Continuity Plans in place

Mobility as a Community | The community-based approach as an innovative paradigm, exploiting new technologies

MaaC Ecosystem

FNM has initiated a VENTURE CAPITAL PATH, investing in STARTUPS consistently with a clear industrial logic and a long-term approach, to complement traditional mobility business with NEW PARADIGMS and with a DATA-DRIVEN APPROACH

• FNM joined CDP Venture Capital Sgr's Corporate Partners I Fund in 2023: the Group is investing €10mln in the Infratech Compartment
• FNM invested €7.5mln in startups with market-based business models, integrating these business with FNM's core activities and increasing their value (synergies) - further support within Plan's horizon
• Continuous innovation, people training and new operating models as pillars of the Group's Plan
• Development of an innovative mobility platform, Flexymob, evolving the Mobility-as-a-Service paradigm towards the Mobility-as-a-Community one

Flexymob | the platform that aggregates mobility services

• Flexymob is a digital platform designed for B2B clients, aggregating mobility services to meet the needs of businesses, large events and stadiums
• Key Features:
  • Centralized platform for planning, booking, and paying for mobility solutions
  • Tailored solutions based on mobility habits and specific needs
  • Enhanced community experience through seamless service integration
• Goals:
  • Support the full transition to green mobility
  • Provide efficient, user-friendly access to sustainable transport options
• The platform simplifies mobility management while promoting eco-friendly practices

Strategic Plan Guidelines

Sustainability targets

Strategic Plan Projections

• Segments
• Consolidated economic and financial projections
• Dividend policy & Outlook
• Focus on ESG

Appendix

Main assumptions driving 2024-2029 economic and financial performance

Mobility Infrastructure	• Motorway infrastructure: manage the MISE concession, set to expire in 2028, assuming a likely technical extension • Intermodal Terminal: complete the Sacconago (Busto Arsizio) logistic hub in synergy with existing terminal • Railway infrastructure: manage in continuity Ferrovienord concession through investments funded by Regione Lombardia
Ro.S.Co.	• Fleet renewal: invest in new Caravaggio trains for the Trenord service • Corporate services: Continuous support to the development of corporate activities
Mobility & Services	• Local Public Transport: manage LPT service concessions and contracts in Lombardy and Veneto, set to expire in/by 2026, up to 2029 assuming a likely technical extension • Payment evolution: consolidate positioning as an acquirer and strategic asset in the Group's mobility ecosystem
Energy	• RES development: build and manage PV and Wind plants (≈350 MW by end of 2029), benefiting from incentivized tariffs • Hydrogen production and sale: start H2 production, mainly related to railway transport
Group	• Scope of consolidation: maintain the current perimeter of equity-consolidated subsidiaries • Debt refinancing: refinance debt including the €650 mln bond expiring in October 2026, with a cost of debt aligned with the current market environment • Technology and Startups: invest in technological development and startups to support new mobility models • Inflation: ≈ 2% over the plan horizon • Personnel: unit cost increase in line with inflation, headcount increase related to business evolution

Business diversification with focus on low-volatility segments

2 Shift includes a growth in exposure to market-driven businesses, especially through intermodal and mobility services

3 Low-volatility sectors remain the core focus of the Group

EBITDA breakdown by segment

Mobility infrastructure – Motorways

Unfolding the MISE concession – a journey shaped by external events

Addendum #2 from 2020-2024 EFP acknowledges MISE's right to receive a terminal value at concession expiry…

Concession Addendum #1

• › Regulatory period 2013-2017
• › Full completion and amortization of investments

Concession Addendum #2

• › Regulatory period 2020-2024, signed on 5th November
• › Right to receive a terminal value equal to non-amortized assets
• › Does NOT take into account the recovery of the "Covid-19 effect" and any "Inflationary effect" – they will be included in the 2025-2028 EFP

Concession Addendum #3

• › Regulatory period 2025-2028, will formalize the approved new 2025-2028 EFP
• › MISE has included a terminal value as the only path to avoid tariff increases above sustainable levels, in line with provisions of Art.8 of Addendum #2
• › Current draft envisages a take-over value ≈€430mln related to planned investments that won't be amortized by 2028

NEW ELEMENT: APPROVED RIGHT TO TAKE-OVER VALUE

ARTICLE 8.3

"Per le opere assentite che il Concessionario ha già eseguito e non ancora ammortizzato alla scadenza della concessione, il Concessionario uscente ha diritto a un indennizzo di tali poste dell'investimento da parte del subentrante, pari al costo effettivamente sostenuto, al netto degli ammortamenti, dei beni reversibili non ancora ammortizzati come risultante dal bilancio di esercizio alla data dell'anno in cui termina la concessione, e delle variazioni eseguite a fini regolatori. L'importo del valore di subentro è a carico del Concessionario subentrante"

… and the duty to continue ordinary operations with a right to apply tariff increases until concession hand over

› Applicable tariffs

• Operational charge: based on the "carryover" of the tariff in force
• Construction charge: determined with art.21 of ART n.69/2019
• › Starting RAB = Takeover value at concession expiry
  • decreased annually by the average depreciation of the last 3 years
  • increased annually by necessary capex
• › Allowed rate of remuneration = WACC at concession expiry
  • remunerated trough the construction tariff
  • Excess of collected cash flows vs amount allowed by ART, reduce the final terminal value

FOCUS: ART DEFINES TECHNICAL EXTENSION MECHANISM

ARTICLE 8.1

"[…] Alla scadenza della concessione, salva diversa indicazione del Concedente, il Concessionario resta obbligato a proseguire nella gestione ordinaria delle autostrade e delle relative pertinenze, alle condizioni della presente Convenzione come modificata con il presente Atto aggiuntivo e dalla Misura 29 dell'allegato A della delibera ART n. 69 del 2019 […]

Il Concessionario uscente resta, altresì, titolare delle tariffe di pedaggio autostradale di cui all'art. 16 del presente Atto Aggiuntivo e del relativo diritto di conseguire gli eventuali aggiornamenti tariffari maturati nel periodo […]."

Motorway | Financial and operating highlights

STRATEGIC OBJECTIVE

• Strengthen position in motorway concessions, leveraging recent know-how and O&M expertise

• Participate in upcoming concession tender for MISE when launched

• Management of MISE concession expiring in Oct.'28 trough a technical extension (Art. 29 – ART 69/2019)

• Delivery of €555mln investment plan
• Approval by CIPESS and Court of Auditors of EFP 2025-2028 with quantification of the take-over value, which could be reduced for the net benefits deriving from the technical extension

CAPEX plan back-end loaded and short remaining concession life…

1 – "committed" is defined as investments with selected contractor and/or executive project, "uncommitted" is the remainder

… determine terminal value at concession expiry

Mobility infrastructure – Motorways

The acquisition of Viridis initiates a strategic path that brings multiple benefits to the FNM Group…

Diversify mobility infrastructure portfolio and enhance growth potential:

• › Expands FNM's portfolio with a different risk/return profile, mitigated by incentivized contracts (CFDs/energy bills) for energy production
• › Overall more balanced portfolio thanks to higher expected IRR, longer duration and uncorrelated revenue streams
• › Fully aligned with strategic objectives for sustainable growth, advancing ESG targets and supporting energy transition

Agile operational structure which allows for a flexible development approach:

• › Existing asset portfolio and agile structure with proven know-how in the sector immediately operational and able to generate operating cash flows
• › Well-diversified pipeline allowing flexible growth based on external conditions and financial availability
• › Selective greenfield development leveraging on significant existing opportunities and strong project success rates leads to attractive IRR, also improved by in-house project development

A team with extensive renewable energy experience and a solid track record:

• › Acquisition of an industrial entity that has the ability to grow, develop and manage investments over time with a successful track record
• › Management with proven capabilities in leading energy organizations with average experience of 16 yearsin clean energy
• › Developed and revamped ≈150 MW of greenfield and brownfield projects, with ≈110 MW sold to major renewable investment funds

1

2

Energy | Financial and operating highlights

Expanding its presence in renewable energy, investing in both PV and Wind power, to actively contribute to the energy transition

• Realize and operate ≈350 MW of PV and Wind plants by end of 2029, accessing incentivized tariffs (FER1 and FERX)
• No self consumption assumed, energy sold to third parties
• Potential pipeline of up to ≈700 MW (≈100 MW authorized and/or nearly authorized)
• Manage biogas facilities until incentives expire in 2028
• Start hydrogen production for rail transport and distribution for motorway network

Industry-leading asset management and O&M

• Flexible O&M: In-house asset management combining outsourced O&M activities performed by prime suppliers with 24/7 availability and premium/penalty for emergencies
• Maximize plants availability and efficiency and spending rationalization
• Overhead costs on average ≈€2/3mln per year¹
• Selected technologies and quality of EPC components:
  • Tier 1 panel and inverter suppliers
  • Technological Evolution: starting with mono and bifacial panels. Mono-PERC technology is used up to 2024 with efficiency improvements expected through the transition to mono-TopCon from 2025 onwards, targeting >23% module efficiency

Direct OPEX PV & Wind | €/MWh Achieved through…

Goal to develop pipeline for additional 280 MW by 2029

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Production maximization and route to market

MOBILITY & SERVICES

Ro.S.Co | Financial and operating highlights

STRATEGIC OBJECTIVE

• Consolidate its role as Ro.S.Co. for Local Public Transport by pursuing criteria of environmental and economic sustainability

• Remuneration:
  • All rolling stock capex remunerated at the same fixed IRR of 5.5%, with potential upside
• Capex:
  • 13 new electric trains for ≈€130mln
  • H2 trains purchased with PNRR, National and Regional funds (Capex managed-only by FNM Group)

Mobility infrastructure - Railway | Financial and operating highlights

Gross Capex | €mln Managed-only Capex | €mln

Total cumulated investments ≈€65mln Total cumulated investments ≈€1.8bln

STRATEGIC OBJECTIVE

• Strengthen rail network management under concession

• Execute funded investments in railway network and rolling stock

• Complete Sacconago (Busto Arsizio) logistics hub with associated investments

• Manage the regional rail network under concession from Regione Lombardia
• Procure new trainsets to renew Trenord fleet on behalf of RL (managed-only)
• Enhance rail infrastructure investments fully funded by RL (managed-only)

Mobility & Services | Financial and operating highlights

Total cumulated investments ≈€115mln

Gross Capex | €mln Bus transport | mln pax/year

STRATEGIC OBJECTIVE

Consolidate positioning in the LPT sector and prepare for the new tenders planned after 2029 to create a "Lombardy hub" of mobility

• Verona:
  • EFP renewal assumptions for 2026- 2029 with current remuneration (WACC= 8.5%)
  • Starting trolleybus operation from 2027
  • Investment grants ≈€75mln
• Lombardy² : concession extension hypothesis until 2029, with investment in electric buses in 2025 and 2029
• Payment system with positive margins from 2027

Strategic Plan Guidelines

Sustainability targets

Strategic Plan Projections

• Segments
• Consolidated economic and financial projections
• Dividend policy & Outlook
• Focus on ESG

Appendix

Consolidated financial projections show progression driven by mobility infrastructure and energy

46

Investments focused on low-volatility businesses

Cash flow generation support investment plan

Financial sustainability

Commitment to investment grade rating

Baa3	Negative
BBB	Stable

• As a proof of the strategic value of the project, a leading financial institution has already confirmed its availability to support FNM's Strategic Plan, on terms and conditions to be defined, also through the full underwriting of the credit facilities necessary to allow the refinancing of the Bond expiring in 2026 and the development of the investments envisaged in the plan
• Aim to make recourse to a mix of financial instruments consistent with the business profile with the objective to dilute and extend debt maturities

Adj. NFP at 2029 covered by readily ascertainable assets value

• Exclude:
  • Trenord valorization (i.e. cash accumulated up to 2033)
  • PV of future rolling stock cash flows / net book value
  • Net book value of busses
• MISE investments and real estate fair value account for >100% of current market capitalization¹

Strategic Plan Guidelines

Sustainability targets

Strategic Plan Projections

• Segments
• Consolidated economic and financial projections
• Dividend policy & Outlook
• Focus on ESG

Appendix

Dividend Policy

Strategic Plan Outlook

Strategic Plan Guidelines

Sustainability targets

Strategic Plan Projections

• Segments
• Consolidated economic and financial projections
• Dividend policy & Outlook
• Focus on ESG

Appendix

Path to energy transition

55

FILI | one of the largest regeneration projects in Europe

MILANO CADORNA RAIL STATION

Construction of a railway tracks' cover of about 60,000 sqm, including 30,000 sqm of green areas with the presence of Oxygen Factory, a synthetic forestable aimed at improving the air quality

MILANO BOVISA RAIL STATION

Infrastructural development and urban regeneration of the"Bovisa Interchange Node" promoted by Team Mo.Le.Co.La. in partnership with the Municipality of Milan, in the context of the project Reinventing Cities

SARONNO HUB

Reorganisation of the technological/maintenance hub, regeneration of the station area, new location of the museum area

BUSTO ARSIZIO RAIL STATION

Urban regeneration to connect the north and the south of the city through a new urban center with large green areas equipped for collective activities

FERROVIENORD RAILWAY NETWORK

An intervention of planting and reforestation of thousands of trees in Lombardy municipalities crossed by the railway network of FERROVIENORD. The first phase covers an area of about 41,000 acres crossing 24 municipalities in two provinces of Lombardy.

FROM MILANO CODORNA TO MALPENSA

The cycle superhighway runs for 54 km between Milano Cadorna and Malpensa Airport without interruption.

H2 | Hydrogen projects

The FNM Group

Strategic Plan Guidelines

Sustainability targets

Strategic Plan Projections

Appendix

Key investments in Associates and Joint Ventures

Minority investments in Motorway concessionaires active in Lombardy (36.7% stake in APL and 11.3% in TE), including the shareholders' loans

1 – includes the indirect participation in TILO SA (50% controlled by Trenord and 50% by Swiss Federal Railways SBB); 2 – FNM owns 22.55% of Tangenziali Esterne di Milano S.p.A. which holds a single shareholding equal to 48.4% of the highway concessionaire Tangenziale Esterna S.p.A., and dicrectly 0.386% of the concessionaire; 3 – FNM owns 50% of Omnibus Partecipazioni S.r.l. with Arriva Italia, holding company which in turn owns about 50% of ASF Autolinee. The remaining 50% is held by S.P.T. Holding S.p.A. whose shareholders are local public entities; 4 – the total value of >€230mln is composed as follows: 70% represent the value of equity investments and 30% consist of shareholder loans, which can be considered as quasi-equity

Trenord | Among the most important LPT railway players in Europe excluding the National train operatorsties

Trenord is a 50:50 JV between Trenitalia and FNM Group and operates passengers rail services in Lombardy region

• Trenord, established in 2011, is a leading suburban and regional rail operator in Europe, servicing 460 stations over 2,000 km of network. It covers 77% of Lombardy's municipalities, benefiting 92% of its citizens. Additionally, Trenord manages the Milan rail link (Passante Milanese), the connections to the Canton of Ticino (in partnership with Swiss Federal Railways), and the Malpensa Express to Malpensa International Airport
• Trenord operates 467 trains leased from FNM Group, Trenitalia and Regione Lombardia with a production for LPT services of 40.7mln trains-km in 2023

Trenord | P&L guidelines

EMARKET SDIR
CERTIFIED

	ACT 2023 (€mln)	Avg. '24-33 (€mln)
Fare revenues	383.2	2033 +65% vs 2023
PSC contribution Revenues accrued in P&L based on current EFP assumptions, subject to annual review	438.4	510 / 520 1
Revenues	897.1	1.000 / 1,100
EBITDA	200.8	≈ 170
EBIT	35.2	30 / 35
Net Result	19.0	≈ 15

PSC contribution may be revised upward/downward depending on actual traffic performance, in order to balance economic-financial equilibrium and reasonable profit of the Contract

1 – Average variable PSC contribution applicable from 1 December 2023 to 30 November 2033 based on current EFP assumptions, excluding the interest accrued on the cumulated figurative credit/(debit) deriving from the linearization of PSC contribution paid by Regione Lombardia

Digital platforms | A new approach to mobility built around existing services but tailored to the needs of specific communities

Improve accessibility to services and related transportation according to the Mobility as a Community (MaaC) approach, delivering an integrated transport framework based on existing services mixed with customized services

• The first online platforms to custom-build mobility services to reach and visit a location
• Services: LARGE EVENTS (B2C services and B2B services for accredited users with dedicated login area) + CORPORATE (mobility solutions for home-to-work travel)

• invested €1.0mln for a 40% stake in BusForFun in 2020/2021
• Provider of alternative mobility through the FlexyMob model, targeted mainly to companies (B2B) through a web platform that offers tailor-made event packages that can be booked and purchased on the platform

• invested €2.5mln for a 33% stake in Sportit in 2021
• Active in the Winter Tourism sector, targeting communities of sports enthusiasts through digital platforms that allow fans to plan and purchase a vacation with all services related to winter sports and the mountains. The company operates mainly under the Snowit and Bikeit brands

• invested €1.0mln for a 30.8% stake in Mbility in 2023
• Facilitates the availability and increases the provision of transportation services, including accompanied transportation, for frail or disabled people through its proprietary digital platform

APL | A strategic infrastructure for Lombardy's road system

Source: APL, Sustainability Report 2023

TEM | The new outer road system in Milan

• FNM holds though MISE a 11.3% stake in TE¹ (ASTM controls the remaining 88.7%)
• The new outer ring road system was needed to improve traffic flow:
  • rationalize the congested mobility following significant urban expansion, especially towards the east, integrating the route of the existing ring roads
  • geographical area with a strong industrial vocation, connecting the A35 – BreBeMi with the existing Milan ring road system (East, West and North) managed by MISE
• Total length of 32km, as well as 38km of interchanges and related works
• Concession is set at 50 years starting from the entry into operation of the entire motorway link in May 2015

Consolidated revenue projections

FNM POWER

• Hydrogen will be produced in three different plants located in Brescia, Iseo and Edolo
• Production will cover the needs of the group's future fleets, starting with the first planned trains

LPT bus fleet evolution at 2029

Contacts

Valeria Minazzi Investor Relations Director Fixed line: +39 02 8511 4302 valeria.minazzi@fnmgroup.it investor.relations@fnmgroup.it